The offer, through the Snowball Effect platform, is the largest amount raised by a New Zealand crowd-funder but it was shy of the $4.97 million maximum target set.
The offer had originally only been offered to Squirrel’s database but when only $500,000 of the $1.97 million available to retail investors had been taken up at the end of March, it was made public.
The money raised from the crowd will cover restructuring and offer costs, the development of a new online mortgage application process, a Squirrel Money app, and seeding the Squirrel Money reserve fund, which protects investors in the peer-to-peer platform from defaults.
Squirrel also plans to put $2 million into its Squirrel Money underwriting facility to enable it to process loans more quickly.
Bolton said he was happy with the outcome. "Totally. The biggest crowd raise ever in New Zealand - $3.5 million is exactly what we need and it sets us up well."
Squirrel has been going for eight years and is looking to arrange more than $1 billion in mortgages in the year to March 31, 2017.
In its offer document is says mortgage volumes have grown on average by 57% a year for the past four financial years. They have gone from $130 million in 2012 and were expected to be around $800 million in the just completed financial year.
"Squirrel Mortgages will have pre-tax operating earnings of $1.6 million for the year ended March 31, 2016 which is projected to increase to $5.7 million in the year ended March 2019."
"The reintroduction of trail commission by banks will contribute significantly to profit growth in Squirrel Mortgages even if our volume of loans arranged each year remains the same," the document says.
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